Society and Credit Unions Have Come a Long Way, Baby

In the early 1970s, a large group of women across the country who were tired of the double-standards of lending practices and discriminatory financial laws decided to take matter into their own hands.

They started their own feminist credit unions.

Women at the time could almost never acquire a loan in their own names or establish their own credit. Everything was in their husband’s name even if the woman in the household was working or the person paying the bills. If a woman was single, it was equally as difficult to obtain a loan and more often than not were required to have their parents co-sign the loan papers.

“I remember that even though I paid all of our bills and I had a job, I couldn’t even get the phone bill turned on without my husband speaking to a representative,” said Cindy Prestandrea, CEO at the $150 million-asset Prince George's Community Federal Credit Union in Maryland.

She began working at Naval Federal Credit Union in 1972. “But at the time, because I grew up in a house with a father who was very sexist and my mother was very subservient, I didn’t think it was wrong. Times have really changed.”

But it wasn’t without a fight.

In 1973, Gloria Steinem, editor of Ms. magazine, addressed a crowd at a university near Dallas. Afterward, some local activists went up to Steinem and asked what she wanted them to do for the movement. She said, “Start a credit union.” In 1974, they took her words to heart and by 1976 there were 18 feminist credit unions located across the country.

The goals were simple yet important to the feminist movement of the day. The new credit unions would not discriminate against women and provide small loans for women business enterprises and personal loans. It was hard for women in the ’70s and ’80s to rebuild their lives if they experienced financial difficulties or if they had gone through a divorce. Women (especially those of low-incomes) often received bad credit, custody of their children and lived in housing where they struggled to pay the rent.

“We helped a lot of women back then,” said Jackie Fry, who was a teller for two years at California Feminist Federal Credit Union in San Diego. “A lot of women had to hide money from their husbands to escape a bad marriage, and we even financed abortions and divorces. It was very personal and we were very proud to be a part of the movement.” The California Feminist Credit Union closed in 2011.

Other feminist credit unions were located in Detroit, New York, Chicago, San Francisco, Los Angeles and San Diego, Seattle, Denver, Wisconsin, Washington. D.C., Houston, Pittsburgh and other cities.

At some of the feminist credit unions, men could join, but they needed to be members of organizations such as the League of Women Voters or the National Organization for Women.

“We really were performing a service that was needed back then,” said Martha Lindly, a member of the Seattle chapter of NOW and a volunteer at the Washington State Feminist credit union in Seattle in 1978. “Women had a lot of reasons back then to hide money. Times were so different, and you couldn’t get help from the police or agencies like you can now. I’m pretty proud of those days.”

But running those credit unions was not easy.

At the Connecticut Feminist Federal Credit Union delinquencies were high, and staffers quit during a discussion on whether to also give loans to non-white women and poor women. At its peak, the Connecticut Feminist FCU had $200,000 in assets (up from the $135 chipped in by the founders) and 1,100 members. The 700-member Washington State Federal Feminist Credit Union in Seattle had to stop paying interest on loans in 1980 because it was saddled with more than $20,000 in delinquent loans. It was forced to take some collections to court, which other women decried as ‘unfeminist.’

Over the years mainstream credit unions became more open to lending to women, and their voices were finally heard. The growth of these alternative financial institutions inspired Congress to pass the Equal Credit Opportunity Act. It was phased in over a two-year period in the mid-1970s. The feminist and women's credit unions educated their members so that they could learn their rights under the ECOA. Women were able to acquire loans for cars and homes in their own names, and they never looked back.

On Oct. 31, 2012, an era came to a halt as the $2 million Women's Southwest Federal Credit Union of Dallas shuttered its doors for good. The closed credit union originally was chartered as Feminist Southwest FCU in 1974. The NCUA made the decision to liquidate WSFCU and discontinue operations after determining the credit union was insolvent and had no prospect for restoring viable operations. At the time it was closed, Women's Southwest served numerous select groups centered primarily on women's advocacy, interest and affiliation. While strong on support of women and their financial issues, the credit union suffered from idealistic lending practices, too many loan losses and volunteer burn-out–the same issues that forced the other feminist credit unions to close across the country.

“As for women and finances there is still much work to be done,” said Teresa Freeborn, president/CEO of El Segundo, Calif.-based Xceed Financial Credit Union, the $751 million credit union based in El Segundo, Calif.

“While we’ve come a long way, I’m sometimes shocked to see how far behind we still are. It wasn’t that long ago that some of our credit union's lending policies still required a husband to co-sign on a loan for a female member... Today, the majority of household financial decisions are made by women, yet we’ve found in our research that they often don’t have the same level of understanding as their male counterparts.”

According to Freeborn women are also more risk averse, and they are more likely to find themselves in dire financial straits due to divorce, death of a spouse, parents who need care and children who need help financially. Recognizing this need, Xceed has developed programs to support the needs of women. Nearly 40% of Xceed’s primary members are female, and over 50% of their SEG contacts are female. Through ongoing education. they offer in their offices, as well as direct with their SEGs, they help women navigate credit, budgeting, retirement planning, caring for others and even how to help their children master their finances

“It’s sad, but we can hold our heads high because we made a difference,” Fry said. “We made history.”